Sirius Expands Wal-Mart Presence, Adds 90,000 subscribers

4/21/2004 03:11:00 PM Eastern

By: By Amy Gilroy

New York - Sirius satellite radio service will be available in the majority of Wal-Mart stores starting later this year via a Jensen plug-and-play radio, and the company said it hopes to bring an additional radio brand to market through Wal-Mart sometime in the second half.

Sirius said the Jensen radio will roll out in a soft launch at Wal-Mart in June or July. Supplying such a large number of stores will take several months, said Sirius president and CEO Joe Clayton, because "We’re putting live feed kits in every location."

Sirius has previously been available in a few hundred Wal-Mart locations.

Sirius also announced in an earnings conference here that it added 90,602 subscribers during the first quarter for a total base of 351,663 subscribers. This represented a 35 percent increase over the last quarter and a 138 percent increase for the quarter year over year, but it still leaves Sirius well behind competitor XM, which has a subscriber base of 1.6 million and which added 320,000 subscribers during the first quarter.

Of the 90,000 new Sirius activations, 24,000 were generated by the OEM automotive, marine, RV or truck sectors. Sirius also said its retail radio sales share reached 41 percent in February, according to NPD in Port Washington, N.Y.

Clayton claimed that Sirius is on target to meet its goal of one million subscribers by the end of the year, which will be helped in part by Sirius’ agreement with Daimler Chrysler to offer Sirius radios in eleven 2005 model year vehicles, including the Jeep brand. This is expected to generate over 500,000 new subscribers by mid 2006.

Sirius said second-half subscriber results will also increase by mid summer when RadioShack begins selling a Sirius plug-and-play product called the Orbiter that comes with a boom box option. In addition, over 10,000 Echostar dealers will begin selling a Sirius plug-and-play product, and over six million DISH Network subscribers will receive Sirius music broadcasts on their TVs beginning in May.

Clayton said products with next-generation chipsets — internally called "2.5 generation" — would be available in time for the Labor Day selling season. These products will be sleeker and less costly, he said. Sirius also expects to end its free receiver and rebate programs at the end of the month.

Clayton also announced Sirius reached an agreement with ST Microelectronics to produce its 3.0-generation chipsets in 2005.

XM contacted TWICE shortly after the Sirius conference to dispute Sirius’ claim of a 41 percent retail sales share. Said Dan Murphy, XM VP retail marketing and distribution, "The 41 percent has to do with purchases of product and product given away but not activated. XM has over 72 percent of the retail market share in activations."

Asked to respond to Murphy’s statement a Sirius spokesman said, "We stand by the figure. It wasn’t our sales figure. It was determine by NPD, which tallies these statistics for the industry. So we stand by it."

XM also noted that it expects to increase its presence in many retailers this summer as XM Direct smart cables become available in June and July for Sony, Pioneer and Alpine head units. Smart cables for Kenwood products are expected to follow in August, said Murphy.